The Jindal administration Tuesday backed off its aggressive time frame to make major changes in the health insurance offerings for about 230,000 state employees, teachers, retirees and their dependents.
Group Benefits members will now have through November to decide on the type of health coverage they want and to enroll in the appropriate program.
And now the new health plans won’t begin until March 1, instead of Jan. 1. That gives the administration enough time to go through the legal process for getting approval for the changes in benefits that the state’s top lawyer said was required.
“Shifting our timeline will give people the chance to get accurate information and better understand their options,” Commissioner of Administration Kristy Nichols said. “But March 1 is as far as we can extend the deadline without putting the Office of Group Benefits in (financial) jeopardy.”
Escalating claims and an administration decision to reduce premiums at the same time resulted in the program’s reserves declining from more than $500 million three years ago to just over $200 million today.
The costs of medical and pharmacy claims run higher than monthly revenues, which taxes the reserves further.
Nichols said extending enrollment and deferring the start of changes lessens savings by $10 million a month.
Group Benefits is preparing to offer more of a variety of health plans to its members. The premiums will remain the same but out-of-pocket expenses such as deductibles, co-pays and coinsurance are going up, sometimes substantially.
The state and school districts pay 75 percent of premiums for their employees’ policies.
The timing changes come after administration officials heard complaints at a legislative hearing last week about how Group Benefits was going about implementing the health plan offerings.
Attorney General Buddy Caldwell also issued a legal opinion concluding that Group Benefits had not followed the approval process in state law in advance of making the changes.
State Rep. John Bel Edwards, D-Amite, who asked Caldwell to weigh in, said the administration may want to postpone the changes, suggesting the potential of a lawsuit.
Group Benefits announced it would begin the approval process, which requires publication of benefits changes, an opportunity for public comment and a review by legislative committees. The committees then send a recommendation to the governor.
Group Benefits expects Gov. Bobby Jindal to have approved the changes by March 1, the new start of the health plan.
The program also is issuing emergency rules seeking retroactive approval of pharmacy program and prior authorization changes that took effect in August for active employees and retirees without Medicare. Emergency rules have the same effect as regular rules, for up to 120 days.
In other announcements, Group Benefits advised that the enrollment period for supplemental insurance products, including dental, vision and life insurance, will be extended through November as well. Those plans will take effect Jan. 1 along with flexible spending plans.
Flexible spending accounts allow employees to set aside a portion of their paychecks to pay for qualified expenses before taxes are deducted.
In addition, retirees who are enrolled in a Group Benefits health plan option, either as primary or secondary coverage, will be allowed to remain in a comparable option without having to re-enroll. Nichols said the change was made in response to a suggestion made during a legislative hearing last week.
Retirees interested in Medicare Advantage plans are still required to enroll by Dec. 7 for the plan year that begins Jan. 1.
Follow Marsha Shuler on Twitter, @MarshaShulerCNB. For more coverage of the State Capitol, follow Louisiana Politics at http://blogs.theadvocate.com/politicsblog.